Types of Companies in Saudi Arabia: LLC, JSC, Branch 2026

Most lists of Saudi company types were written for a law that no longer exists. They still give a limited liability company a ceiling of 50 partners and a joint stock company a floor of two shareholders.

The Companies Law in force since 19 January 2023 says neither. It also created a form built for a founder acting alone, which most lists leave out.

This page reads the law article by article, narrows five forms to the two that fit a foreign founder, and separates the real forms from the labels that only look like one.

5legal forms a Saudi company can take, listed in Article 4

1person is enough to form an LLC, a simplified joint stock company or a joint stock company

SAR 500,000minimum issued capital of a joint stock company, the only form with a floor in the law

The five forms the Companies Law recognises

Article 4 lists five forms and no others. A company registered under the law is a Saudi company, whoever owns it, under Article 3.

Two readings follow from the table.

• All three capital companies accept a single owner. Articles 157, 150 and 98 each organise the one person version.
• Only one form carries a legal capital floor. For an LLC and an SJSC, the owners write the figure in the constitutional document.
• The partnerships expose personal assets, which removes them from a foreign founder's shortlist before any other question is asked.

What the 2022 law changed, and what older guides still carry

The law was issued by Royal Decree M/132 and replaced the 2015 Companies Law in full. Article 280 repeals the earlier text by name.

Several figures that still circulate belong to the repealed law. Each row below can be checked against the article cited.

A constitutional document drafted from an older template may still carry these limits as clauses. A company can impose them on itself. The law no longer does.

The limited liability company, with one owner or several

Article 156 defines the LLC as a company formed by one or more natural or legal persons, liable for its own debts. It is the form formation firms propose by default to a foreign owner.

• One owner is enough. A sole owner holds the powers of the manager and of the partners' assembly, and records decisions in writing in a register.
• Capital is whatever the partners set in the articles, under Article 174. The law fixes no minimum.
• Contributions are declared fully paid at formation, under Article 158. Register the figure you can fund on day one.
• Management is one manager or more, chosen among the partners or outside them, under Article 160. A board of managers is optional.
• Stakes are interests, not shares. They cannot be traded freely, and the other partners hold a right of first refusal under Article 178.
• Ordinary decisions need more than half of the capital, and changes to the articles need three quarters, unless the articles ask for more.
• Losses reaching half the capital oblige the manager to call the partners within 60 days to decide whether to continue, under Article 182.

The Companies Law itself sets no nationality or residence condition for the manager. The practical constraint on a non-resident founder comes from other rules, covered in 100% foreign ownership in Saudi Arabia.

The simplified joint stock company, built for founders and investors

The SJSC is new in the 2022 law. It keeps the share based capital of a joint stock company and removes most of its machinery, starting with the capital floor.

Article 139 is explicit: the minimum capital requirement of a joint stock company does not apply to a simplified joint stock company. The Ministry of Commerce service page for the form lists no capital condition either.

What the SJSC adds is contractual freedom, and Articles 142 to 154 list it.

• Management by design. One president, one manager, a board, or any other arrangement written in the articles.
• Lock-up clauses. Shares can be made non-transferable for up to 10 years.
• Approval clauses. A transfer can be made subject to the consent of the company or of the shareholders.
• Forced exit clauses. The articles can oblige a shareholder to sell in defined cases, at fair value unless agreed otherwise.
• Arbitration. Disputes among shareholders or with management can be sent to arbitration in the articles.

These transfer and exit clauses need unanimous shareholder approval to be inserted or amended. Converting an existing company into an SJSC also requires unanimity, under Article 220.

The joint stock company, and when SAR 500,000 is worth it

The joint stock company is the heavy form. It exists for companies that will have many shareholders, issue securities or list.

• Capital floor. Issued capital of at least SAR 500,000, with at least a quarter paid up at incorporation, under Article 59.
• Bank certificate. The paid-up amount is deposited in a bank licensed in the Kingdom, in the name of the company being formed.
• Board. At least three directors, all natural persons, elected for terms of up to four years.
• Assemblies. Ordinary and extraordinary general assemblies, with their own quorum and notice rules.
• Supervisor. The Capital Market Authority once the company is listed, the Ministry of Commerce before.

One firm publishes a SAR 10 million minimum for a public joint stock company. That figure is not in the Companies Law or in the ministry's Implementing Regulations. If a listing is the plan, confirm the capital expected under the Capital Market Authority's own rules.

For a founder with one or two shareholders, a JSC buys nothing an SJSC does not offer, and costs a board and SAR 125,000 paid in on day one.

A decision path for a founder acting alone

The choice of form is short once the questions are asked in the right order. The form comes third, after the activity and the owner.

1. 1
   Is the investor an existing foreign company that wants no new entity?If yes, a branch is possible. The parent answers for everything the branch does
2. 2
   Will anyone else ever hold equity: a co-founder, an investor, staff?If yes, start as a simplified joint stock company and write the share rules in the articles
3. 3
   Is it a wholly owned operating company with one decision maker?If yes, a one person LLC. One manager, one register of written decisions
4. 4
   Is a listing or a public offer planned?Only then does a joint stock company justify SAR 500,000 and a three member board

Starting as an LLC does not close the other doors. Article 220 allows a company to convert to another form by the majority needed to amend its articles.

• LLC to JSC is an ordinary conversion, subject to the JSC's capital and registration conditions.
• LLC to SJSC needs every partner to agree, so it is easiest while there is one owner.
• Conversion keeps the legal person. Contracts, registrations and liabilities carry over to the new form.

Branch of a foreign company or a Saudi LLC

A branch is the foreign company itself, registered in the Kingdom. It is the alternative to forming a company at all.

Article 236 allows a foreign company to operate through a branch or a representative office. Under Article 239 the branch is the company's domicile for its Saudi business, subject to Saudi law.

Three points decide between them.

• An individual founder has no parent company, so the branch is not available. This rules it out for most readers of this page.
• A branch puts the parent's balance sheet behind every Saudi contract. Some public clients like that. The parent's board may not.
• Starting business before registration is completed makes the foreign company and the people involved jointly liable, under Article 240.

Tax treatment also differs between a branch and a subsidiary, and it is covered in Saudi Arabia corporate tax.

RHQ, technical office, holding and sole establishment are not company types

Four labels appear in most lists next to the LLC as if they were alternatives to it. None of them is one of the five forms of Article 4.

The RHQ is a programme with headcount conditions. The Ministry of Investment's 2026 guide requires 15 full time employees within a year, three of them at executive level, and bars the RHQ from ordinary commercial operations. It is a decision for a multinational group.

The technical office cannot sell. The same guide prohibits it from concluding contracts or carrying on any commercial activity, directly or indirectly. An office that starts invoicing is operating outside its registration.

Can a foreigner register a sole establishment

Sources disagree, and the text that would settle it was not available for this page. Both positions are set out below.

• Position A, restricted. At least one Saudi formation firm states that the establishment is open only to Saudi and GCC nationals.
• Position B, silent. The Ministry of Commerce service page for an establishment lists age and employment conditions and no nationality condition.
• What the investment route shows. The ministry's service for a company under an investment registration lists the two joint stock forms, the LLC and the partnerships. It does not list the establishment.
• What does not change either way. The owner of an establishment is liable for its debts without limit.

Treat the establishment as unavailable to a non-GCC founder unless the Ministry of Commerce confirms it for your case. A one person LLC gives a single owner limited liability with no capital floor.

What the form does not decide

Much of the effort spent on choosing a form is aimed at a problem the form cannot solve.

The first three rows are treated in 100% foreign ownership in Saudi Arabia. The auditor row needs care, because the exemption reads differently for a foreign owned company.

• The exemption. A micro or small company need not appoint an auditor. It qualifies by meeting two of three limits: revenue of SAR 10 million, assets of SAR 10 million, 49 employees.
• A branch never qualifies. Article 19 excludes a foreign company, and Article 238 requires an audited report for the branch.
• A subsidiary rarely qualifies. A company owned by another company is exempt only if every company in the group is itself micro or small.
• A company owned by a foreign individual is the grey case. It is a Saudi company under Article 3, so the foreign company exclusion does not obviously reach it. Confirm before relying on it.

The filing side of this question sits in Saudi company annual compliance.

One register per company since April 2025

Structure used to multiply with geography. A second city or a second activity meant a second, subsidiary commercial registration.

The Commercial Register Law in force on 3 April 2025 ended that, according to law firm analysis of the text. A business now holds a single registration valid across the Kingdom, and existing sub-registers have five years to be folded in or transferred.

• A new location is not a new entity. It is an update to the same registration.
• Old sub-registers are a clean-up task, with a deadline of 3 April 2030.
• A separate company is still the right tool when the aim is to ring-fence a risk or bring in a different partner.

2015Previous Companies Law: 50 partner cap on an LLC

Jun 2022Royal Decree M/132 issues the new Companies Law

19 Jan 2023New law in force: simplified JSC, single owner in every capital form

Feb 2025Investment Law replaces the licence with a registration

3 Apr 2025One commercial registration per business

3 Apr 2030Deadline to regularise old sub-registers

1. 2015Previous Companies Law: 50 partner cap on an LLC
2. Jun 2022Royal Decree M/132 issues the new Companies Law
3. 19 Jan 2023New law in force: simplified JSC, single owner in every capital form
4. Feb 2025Investment Law replaces the licence with a registration
5. 3 Apr 2025One commercial registration per business
6. 3 Apr 2030Deadline to regularise old sub-registers